The campaign rally for Paul LePage started at a Dunkin’ Donuts parking lot, across the street from Central Maine Medical Center in Lewiston. The crowd, chanting “Pay your bills!” and sprinkled with children holding signs that read “Save our hospitals,” eventually migrated to the sidewalk.

LePage, running for governor on a platform that included making a $248 million debt payment to Maine hospitals, hoped to get the rally onto the CMMC grounds.

Additional Photos

Paul LePage, then the Republican nominee for governor, talks to supporters in front of Central Maine Medical Center on Oct. 14, 2010, at a rally to decry the state’s debt to Maine’s hospitals. As governor, he has delivered on the debt payment that he promoted at the rally, named an industry lobbyist to a Cabinet post and called for another debt payment. 2010 file photo by Scott Monroe/Kennebec Journal

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But the sidewalk was as close to the hospital as he and his campaign operatives would get.

“We’d asked to do it on campus, but the hospital wouldn’t allow it,” said Dan Demeritt, then LePage’s spokesman, of the 2010 event. “They are very careful not to engage in partisan activity.”

Three years later, Maine’s Republican governor has a much closer relationship with the state’s hospitals. He delivered on the debt payment he called for at the CMMC rally. He hired Mary Mayhew, lead lobbyist for the industry’s trade group, the Maine Hospital Association, as commissioner of health and human services — which oversees hospital regulation in Maine.

And with a re-election campaign pending next year, LePage has made payment of another $484 million in hospital debt a centerpiece of his vision for how to order the state’s finances.

The hospital association has reinforced LePage’s message over the last few weeks with a flurry of paid advertisements and newspaper opinion columns.

It’s an alignment that makes Democrats queasy. Party leaders agree that the hospital debt must be paid. But some are suspicious of what they view as the industry’s apparent coziness with LePage. They say hospitals didn’t acknowledge that the debt payment was largely made possible by leftover money from John Baldacci’s Democratic administration, which had made payments that resulted in $3.7 billion going to hospitals since 2002.

They note that Baldacci also approved a new Medicaid reimbursement system that pays hospitals on a weekly basis, replacing a system that state officials partially blame for the current debt.

“This governor paid the hospitals with money that we saved for them,” said Sen. Margaret Craven, D-Lewiston, chairwoman of the Health and Human Services Committee. “He takes credit for it every time he turns around.”

Steven Michaud, president of the hospital association, says there’s no connection between hospital lobbying for debt payments and LePage’s campaign or policy messages.

“The irony is that the hospitals couldn’t be more apolitical,” Michaud said. “I don’t know why both sides didn’t grab ahold of the issue. One (Republicans) did, and we had nothing to do with it. They (Democrats) didn’t like it, but I don’t know what to do for them.”

He added, “We weren’t part of any campaign. We educate everybody all the same.”

The partisan tension underscores the political and economic influence of hospitals and policymakers’ desire to stay in their good graces. Over the past decade, hospitals or their political action committee have spent $1.2 million on lobbying and campaign contributions, according to state campaign finance and lobbying expenditure reports.

The trade group says its members employ more than 22,000 people. Eleven hospitals are among the state’s top 30 employers, according to the Maine Department of Labor, and four are in the top 10.

In some rural communities, hospitals are the largest employer.

“They are the 800-pound gorilla in terms of jobs and community leadership and local investment,” said Demeritt, the former LePage spokesman.

HOSPITALS, COMMUNITIES SOLID

Community attachment to hospitals is tangible, and in some cases unbreakable: Children are born there. Loved ones are cared for. People remember.

Last year, residents in Boothbay Harbor launched a petition drive to prevent the conversion of St. Andrews Hospital and Healthcare Center into a strictly urgent-care facility.

In the Brunswick area, some residents have chosen sides in a long-standing turf war between Mid Coast Hospital and Parkview Adventist Medical Center. The battle for market share has prompted some to put “Take me to Parkview” bumper stickers on their vehicles.

Lisa Miller, a Democratic former state representative who works as a program officer for The Bingham Program, a nonprofit organization that promotes improved rural health care, said hospitals are keenly aware of their community connections.

“The hospitals recognize the power of constituents, the will of communities,” Miller said.

The built-in constituencies enable hospitals to wield influence through their boards of directors and in Augusta through the Maine Hospital Association, she said.

Thirty-four Maine hospitals are nonprofit corporations, overseen by self-governing boards populated by prominent, well-respected and well-connected members of the communities they serve.

The boards’ members, like many of the hospitals’ executives, are people of diverse political and professional backgrounds who are willing to lobby policymakers.

“It’s tough to get a bunch of phone calls from respected community leaders on any issue,” Miller said. “You get six, eight or 10 from some hospital board members and that’s like a tidal wave to a legislator.”

EXTENT OF INFLUENCE DEBATED

Gordon Smith, spokesman for the Maine Medical Association, which represents the state’s physicians, echoed Miller’s view. “What legislator hasn’t been invited to a breakfast by their hospital and not heard about the need to pay the (hospital debt)?” he asked.

The hospital association spent close to $326,000 lobbying state lawmakers between 2002 and 2012, according to filings with the Maine Ethics Commission. Individual hospitals have spent another $547,000 on lobbying.

Other ethics commission records show that the hospital association’s political action committee, Friends of Maine Hospitals, has spent more than $307,110 on legislative and gubernatorial elections since 2002. The contributions have been mostly split between Democrats and Republicans, a distribution strategy that often signals that a group is taking the long view to ensure that it doesn’t fall out of favor with either party.

The hospital PAC has donated $2,000 to LePage’s re-election committee. Until recently, LePage was the only prospective gubernatorial candidate with a campaign apparatus in place.

The American Hospital Association, the parent organization for the Maine Hospital Association, has also split its campaign spending between Democrats and Republicans, favoring one party during some elections.

Michaud, the hospital association president, questions the political power of hospitals.

“I’m not sure how strong our voice is because I can’t see anyone else running around begging to be paid four years late,” Michaud said. “That’s what we have to do. I don’t see any other group having to do that. I question whether there is much influence.”

He said Mayhew, the DHHS commissioner and former association lobbyist, has proposed an agency budget that cuts hospital reimbursements by $45 million a year.

“The budgets, completely separate from the old debt, are very problematic for us,” Michaud said.

But David Farmer, who was communications director for Baldacci when the Democrat was governor, disputes Michaud’s characterization of hospital influence.

“They are very effective and they are first in line,” Farmer said. “Whether or not that is the right policy, that is the political truth.”

Baldacci witnessed the power of hospitals firsthand in 2004, when he created the Commission to Study Maine’s Hospitals to improve the state’s health care delivery. Baldacci tapped William Haggett, former CEO of Bath Iron Works, to head the commission.

Under Haggett’s leadership, the commission delivered a report that pointed to inefficiencies. It called for developing a three-region hospital network, closing underutilized community hospitals and merging others to reduce the duplication of services.

The hospital association’s reaction to Haggett’s proposal, which was leaked early, was swift. Mayhew, the association’s lead lobbyist — now LePage’s health commissioner — claimed that Haggett had hijacked the bipartisan commission and inserted his own agenda. The report was eventually watered down before it was adopted by the Democratic-controlled Legislature.

Smith, with the Maine Medical Association, said Haggett took it on the chin.

“Closing hospitals? That’s a non-starter here,” Smith said.

GROWTH CONTINUES IN SLOW ECONOMY

Despite a weak economy and the Medicaid debt that is still unpaid, hospitals are adding jobs and expanding. State labor statistics show a steady increase in hospital employment since 2002, from 24,272 jobs to 32,354. The figures are higher than those reported by the hospital association because the state includes related health care facilities.

The Labor Department also projects an 18.6 percent increase in hospital jobs, or 7,726 total, from 2010 to 2020. No other employment sector in the state is projected to match that growth.

With jobs at a premium, the employment potential at hospitals will weigh heavily with lawmakers in both parties, as they consider LePage’s budget and his plan for paying hospital debt.

As those deliberations unfold, there are warning signs from inside and outside the state about a downside to hospital growth and the ensuing competition for a limited number of patients.

Most Maine hospitals are below the national occupancy rate, according to a Portland Press Herald report published in December.

The same month, Steward Health Care Systems, a for-profit chain of hospitals, abruptly pulled out of a deal to purchase Mercy Hospital in Portland, citing, among other things, lower-than-expected patient volumes and the cost of paying down Mercy’s $162 million expansion on the Fore River.

Mercy has since entered into an agreement to merge with Eastern Maine Healthcare Systems, which operates a hospital in Bangor and several other facilities.

Miller, with The Bingham Program, said hospital expansions can drive up costs.

Katherine Baicker, a professor of health policy at the Harvard School of Public Health, sounded a similar note in a July article in the New England Journal of Medicine. Baicker said the increased number of health care jobs is a positive only if it leads to improved health outcomes.

“Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck,” Baicker wrote.

Michaud, at the hospital association, acknowledged that hospitals will have to strike the right balance.

“We cut both ways,” he said. “Business and government would be cooked without us because we’re such a big part of the economy, but it’s incumbent upon us to make sure we’re efficient.”

Striking the balance is likely to be a challenging task, with policymakers from both the Democratic and Republican parties clamoring to obtain credit for job creation. Right now, as always, that means the focus is on Maine’s hospitals, said Smith, with the Maine Medical Association.

“Of course they’re influential,” he said. “They should be. That’s been the case for 30 years.”

Demeritt, the former LePage spokesman, said hospitals don’t have to pick a side. The political parties either side with the hospitals or suffer the consequences.

“They exert the pressure on an issue basis, not a partisan basis,” Demeritt said. “You get to the point where you can speak solely on your issues and you don’t have to get into Republican vs. Democrat. That’s a good spot to be in.”

State House Bureau Reporter Steve Mistler can be contacted at 791-6345 or at:

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